Accounting Theory
Introduction
Accounting is a very old science as it is strictly related to the first forms of trade in the old world. According to Belkaoui (1992: 22), the Committee on Terminology of American Institute of Certified Public Accountants (AICPA) defines accounting as follows:
"Accounting is the art of recording, classifying and summarising in a significant manner and in terms of money, transactions and events which are in part at least, of a financial character, and interpreting the results thereof."
Belkaoui (1992: 22) believes that such a definition is limited and a broader alternative is offered that defines accounting as:
"The process of identifying, measuring and communicating economic information to permit informed judgments and decisions by users of the information."
Historical Background
The history of accounting is of importance to those wishing to understand existing and future accounting practices. Historically, the first form of accounting practices was bookkeeping. Bookkeeping resulted from a need of ancient traders in Chaldean, Babylonian, Akkadian, and Assyrian civilizations (Belkaoui, 1992). Those ancient traders developed advanced trading practices to track their costs and incomes. This of course, led to record keeping as the best. Belkaoui states that the earliest known form of record keeping dates back to 3000 B.C. which was found in Old Irak (Belkaoui, 1992).
Egyptian and Chinese civilisations also had old accounting practices for handling both treasury and other government accounts. In Greek civilisation, there was a famous accountant named Zenon. He managed the estates of Apollonius (a Greek minister of finance). Zenon was the first to introduce the first Responsibility Accounting System according to Belkaoui (1992).
In the Roman civilisation, taxes and social classes were dependent on declared properties. As a result, taxpayers were supposed to submit clear financial statements. Of course, these factors enforced the existence of
Accounting is a very old science as it is strictly related to the first forms of trade in the old world. According to Belkaoui (1992: 22), the Committee on Terminology of American Institute of Certified Public Accountants (AICPA) defines accounting as follows:
"Accounting is the art of recording, classifying and summarising in a significant manner and in terms of money, transactions and events which are in part at least, of a financial character, and interpreting the results thereof."
Belkaoui (1992: 22) believes that such a definition is limited and a broader alternative is offered that defines accounting as:
"The process of identifying, measuring and communicating economic information to permit informed judgments and decisions by users of the information."
Historical Background
The history of accounting is of importance to those wishing to understand existing and future accounting practices. Historically, the first form of accounting practices was bookkeeping. Bookkeeping resulted from a need of ancient traders in Chaldean, Babylonian, Akkadian, and Assyrian civilizations (Belkaoui, 1992). Those ancient traders developed advanced trading practices to track their costs and incomes. This of course, led to record keeping as the best. Belkaoui states that the earliest known form of record keeping dates back to 3000 B.C. which was found in Old Irak (Belkaoui, 1992).
Egyptian and Chinese civilisations also had old accounting practices for handling both treasury and other government accounts. In Greek civilisation, there was a famous accountant named Zenon. He managed the estates of Apollonius (a Greek minister of finance). Zenon was the first to introduce the first Responsibility Accounting System according to Belkaoui (1992).
In the Roman civilisation, taxes and social classes were dependent on declared properties. As a result, taxpayers were supposed to submit clear financial statements. Of course, these factors enforced the existence of